THE NATIONAL LEAGUE won last night’s Major League Baseball All-Star game 3-1, and POLITICO’s Daniel Strauss notes: “According to an analysis by University of Minnesota professor Eric J. Ostermeier, who writes the Smart Politics blog, a National League victory in the Midsummer Classic has preceded every election with double-digit GOP House gains since 1950. ... Since 1948, every time the Republicans have gained at least five Senate seats, the National League has won.” http://bit.ly/aRMIZp

BREAKING -- "Obama warns Africans about Al-Qaeda," by AFP's Stephen Collinson: "President Barack Obama warned Africans that groups like Al-Qaeda saw their 'innocent' lives as cheap, in a personal challenge to extremists on the continent after the Uganda bombings. ... Obama, leveraging his African heritage and popularity on the continent, took direct aim at the Shebab and Al-Qaeda after attacks on crowds in Kampala glued to the World Cup final on Sunday killed at least 76 people. 'What you've seen in some of the statements that have been made by these terrorist organizations is that they do not regard African life as valuable in and of itself,' Obama told the South African Broadcasting Corporation."

SPEAKER PROFILE -- "Nancy Pelosi puts her stamp on the House: Pelosi is a master tactician and the most powerful speaker in a half century. Behind her personal brand of power politics – and whether she will still be speaker after the midterm elections," by Christian Science Monitor's Gail Russell Chaddock. http://bit.ly/bHeKfT

Good Wednesday morning. PALACE INTRIGUE: President Obama’s selection of Jack Lew, an alumnus of the Clinton White House, as his new budget director is a victory for members of his economic team who want an aggressive focus on the deficit. Lew, currently Secretary Clinton’s chief operating officer, was the last OMB director under President Clinton. Some in the White House were worried that Lew wouldn’t want to repeat in the same job, but colleagues say he looks forward to being back in the center of West Wing action. Lew will be a non-flashy, credible spokesman for deficit reduction. And he has a long relationship with Erskine Bowles, a co-chair of Obama’s bipartisan fiscal-responsibility commission. THE ALSO-RANS: Laura Tyson was considered more of a show horse than was desired. The none-too-pleased Gene Sperling, who’s still at Treasury and never got his expected tryout under Peter Orszag, wasn’t viewed as a strong enough manager. Too much 1 a.m. stuff -- Clinton-style only goes so far! Lew bio http://bit.ly/awGF6e

--Orszag statement: “I have known Jack Lew for more than a decade … [T]he nation still faces significant fiscal challenges that, as the President has noted, will require some tough choices in the months to come. With his experience, mastery of the budget process, and passion for public service, Jack Lew is an individual especially qualified to serve the President and the American people during these challenging economic times.”

FIRST LOOK: Sen. John Kerry, chairman of the Senate Foreign Relations Committee, today will release more than 1,000 pages of previously classified testimony from Vietnam-era hearings in 1967 and 1968. Kerry says in a statement: “These transcripts and other records were selected because they shed light on an important period of American history and all of its lessons. It is incredible to read through these papers and hear the voices of many of the Senate’s giants wrestling with Vietnam and all its complexity at a time when many of us, including some of us on the Foreign Relations Committee today, were serving as young officers in Vietnam living out those very same questions in a personal way. As legislators and citizens, we can learn an enormous amount from the way our predecessors conducted business and struggled with some of the most difficult questions during a difficult period in our country.”

--Kerry’s committee says in today’s announcement: “The committee staff … prepared a report accusing then Secretary of Defense Robert McNamara of misleading the committee in testimony. Many committee members who had voted for the resolution in 1964 regretted their decision in 1968. … The newly released papers come from an era when Congress conducted much of its business behind closed doors in executive session. Among the other topics covered in the papers are the Senate’s ratification of the Nuclear Non-Proliferation Treaty, the impact of the Soviet invasion of Czechoslovakia and the soaring economic costs of the Vietnam War.”

--Sen. Albert Gore Sr. (D-Tenn.) warned in an executive session: “If this country has been misled… by pretext into a war in which thousands of young men have died, and many more thousands have been crippled for life, and out of which their country has lost prestige, moral position in the world, the consequences are very great.” The volume -- prepared by Senate Historian Donald A. Ritchie and declassified in consultation with the State Department, Pentagon, CIA and National Security Agency – will be linked from http://foreign.senate.gov .

--Tonight, Kerry will speak at a State Department reception commemorating the 15th anniversary of normalized relations between Vietnam and the U.S.: “Although I’ve stood with John [McCain] outside what was once his dank, dark cell, … not nearly enough has been said about John McCain’s courage in making peace. … President Clinton knew that any outreach to Vietnam would give his critics a chance to scold his own Vietnam-era choices. But he forged ahead. John McCain knew the fury many in the POW community would direct at him. … We should make this a moment when we reclaim … a sense of that spirit that some problems are too important to succumb to short-term politics and partisan positioning.”

** A message from Microsoft: At Microsoft, we're committed to providing the technology people need to live and work creatively and productively. This includes fostering partnerships that create economic opportunities around the world. **

TRANSITIONS: Mary Kate Graefe is heading to K Street to work with Pat Williams’ Cormac Group. Mary Kate has been the health-care legislative correspondent for Sen. Feinstein for the past three years. Her last day is tomorrow. (h/t Carrie Budoff Brown)

WHAT THE 7th FLOOR IS READING – “For State Department officers directing calls, adrenaline always on the line,” by WashPost’s Laura Blumenfeld, in the State Department Operations Center (“ops center”): “Down the hall from the secretary of state's suite, the center is a secure, adrenalin-injected space, accessed through the swipe of a badge and the peck of a keypad code. … 60 foreign service officers and other civil servants operate a worldwide 911. They support Americans caught abroad in political violence and natural disasters. They send out alerts when an overseas flight crashes or a grenade hits a U.S. Embassy. They connect, at all hours, Secretary of State Hillary Rodham Clinton to foreign leaders, picking phone numbers out of an address book with 18,120 contacts. On a recent morning, Clinton had an 8 a.m. call scheduled with Tony Blair, the Middle East envoy and former British prime minister. He was traveling in South Africa. ‘Dialing Tony Blair's assistant. Good morning, this is the State Department,’ says ops center officer Sarah Duffy at 7:59 a.m. In Cape Town, Blair's assistant is moving around briskly, trying to find better cellphone reception. … They call it ‘the ballet of the phone call.’ … Another officer, Jennifer Pearce, gets on the line and declares: ‘Introducing Secretary Clinton.’ Pearce clicks on a red ‘S’ icon, for ‘Secretary’ … ‘Hi, Tony!’ says Clinton. ‘Hallo Hillary,’ Blair says. Clinton, at her Washington residence, and Blair, in Cape Town, exchange updates on Palestinian and Israeli peace negotiations. To indicate which party is talking, dialogue bubbles bloom over their computer icon cartoon faces. An officer listens in and transcribes.” http://bit.ly/9WdooD

LIVE ONLINE – 2:30 p.m. ET -- BROOKINGS: Brookings expert Thomas Mann takes your questions about what Congress might leave undone, and members must pass before the August recess. Join the live web chat moderated by POLITICO’s David Mark in The Arena. Register here http://bit.ly/9r9j3A , or submit advance questions to ScoutingReport@brookings.edu .

LAURA INGRAHAM is out with her sure-fire bestseller, “The Obama Diaries,” 373 pages of imagined entries by President Obama, Vice President Biden -- “POTUS & VPOTUS (I love that acronym!), we were just two guys goin’ out for cheeseburgers” -- and others. Sample entries by POTUS: “Went to the Vatican today. Frankly, I wasn’t impressed. … I thought I would have a little fun, so I told the White House switchboard to call Clinton. ‘Hey, Bill,’ I said. ‘I want your advice. I just won the Nobel Peace Prize. What do you think I should say?’ … Priceless! … I think I’ve figured out why I seem to have lost some ground in these tracking polls: the people haven’t heard enough from me! … Rahm, Gibbs, Jarrett, and Axe are all running around like chickens with their heads cut off. Miche says they’re trying to lower my expectations. Rahm says we could lose several Senate seats and lose our majority in the House. Lose the House?! What kind of tobacco is that man smoking?! ….They didn’t think I could beat Hillary. But I did. … I’ve seen this movie over and over and over, and it always ends the same: I win; they lose.” $13.75 on Amazon http://amzn.to/c5J703

COUNTING THE JOBS: The White House today will release a quarterly report on Recovery Act impact, arguing that the stimulus “saved or created about 3 million American jobs, and is on track to meet its goal of 3.5 million American jobs by the end of this year,” a White House official said. Christina Romer, chair of the President’s Council of Economic Advisers, will join Vice President Biden at an 11 a.m. event in the South Court Auditorium in the Eisenhower Executive Office Building to release the new CEA analysis, which says that “roughly $100 billion in Recovery Act funds is leveraging more than $380 billion in public-private investment in projects that create private sector jobs and spur growth.” Dr. Romer then will testify before the Joint Economic Committee at 2 p.m. From her opening statement: “A detailed examination of the incentives for wind energy production suggests that such leverage provisions can have a significant impact on private sector investment behavior. Thus, the Recovery Act appears to be stimulating private investment and job creation at a time when the economy needs it most.”

--OBAMA WILL AMPLIFY THAT MESSAGE TOMORROW, the official said: “On Thursday, the President will travel to Holland, Mich., to highlight how these kinds of investments not only create private sector jobs now, but help American workers and businesses become more competitive. He’ll attend the groundbreaking of the new Compact Power plant -- the ninth of nine new advanced battery plants that will open as a result of the $2.4 billion in Recovery Act advanced battery and electric vehicle awards President Obama announced last August. Before the Recovery Act, there were no domestic factories doing high-volume manufacturing of batteries for electric vehicles and the U.S. produced just 2 percent of the world’s batteries for advanced vehicles, but due to Recovery Act investments, we’ll have the capacity to produce 20 percent of these batteries by 2012 and up to 40 percent in … five years.”

--BUT, BUT, BUT -- WSJ A1, “Fed Sees Slower Growth,” by Jon Hilsenrath: “Federal Reserve officials, who are likely to reveal Wednesday a cut in their assessment of the growth outlook, are divided on how aggressively the central bank should act if the economy slows further. Fed officials still expect the U.S. economy to keep growing. But an updated forecast to be released Wednesday afternoon with the minutes of the Fed's late-June policy meeting is likely to show that officials have trimmed their second-half forecasts—as have many private forecasters.” http://bit.ly/atGcwY

WHITE HOUSE ONLINE -- First Lady Michelle Obama held a live Web chat on the “new and improved” LetsMove.gov, designed to encourage children and their parents to exercise and make better choices in their diets. --Catherine Cheney

“FOR LEFT, GORE STILL MATTERS,’ by Darren Samuelsohn: “While maintaining his innocence in the Portland case, Gore hasn’t skipped a beat in his pitch for a controversial limit on greenhouse gas emissions, lending a critical voice from the left as the Senate edges closer to a vote on an issue to which Gore has dedicated the past decade of his life, ever since losing the White House to George W. Bush. He’s still speaking out via blogs and op-eds, making calls to members of the Obama administration, Senate Majority Leader Harry Reid (D-Nev.) and House Speaker Nancy Pelosi (D-Calif.) and ramping up a multimillion-dollar advertising campaign through his nonprofit group, the Alliance for Climate Protection. … Gore hasn’t done any television interviews since his separation … But Gore’s office also said the former vice president is keeping a business-as-usual media schedule and doesn’t do high-profile interviews unless they’re associated with a book, film release, major policy speech or other significant event.” http://bit.ly/c2CUFG

--Gore will appear with Vice President Biden on Friday at 5:30 p.m. at the Tennessee Democratic Party’s “Jackson Day 2010” in Nashville.

2012 -- Minnesota Gov. Tim Pawlenty op-ed for POLITICO, "Time for Obama to make sacrifices": "As the governor of a state that, like most others, has been facing recession-driven budget shortfalls recently, I understand the challenges in front of the president. ... During my two terms in Minnesota, we balanced every biennial budget without raising taxes. We set priorities and cut spending. ... [I]n Minnesota, we’ve proven: Yes, you can." http://bit.ly/cyFzMh

“GUESSING ABOUT PALIN’S FUTURE HEATS UP,” by Ben Smith:

--SHE WILL: “Palin is the first politician to fully master the new media, both social and ideological, communicating directly with her supporters via Facebook and Twitter even as she confines her interviews to Fox News (which employs her) and other sympathetic conservative outlets. She’s a needle in the vein of the Republican base, and those direct channels would finance a primary and make her intensely competitive for the nomination. And if she’s the nominee, her instinctive new media savvy could allow her to replicate and even surpass Barack Obama’s 2008 success in raising money and communicating on the Internet.

--SHE WON’T: “Palin has created a brilliant platform – but she’s sacrificed any ability to build coalitions, the key to national politics. The same authenticity that compels her supporters repels those in the middle. Polls show that Palin’s standing has steadily declined among the public at large and even among Republicans, even as the intensity of her support shows no signs of flagging. What’s more, she’s created a new kind of national power, one that doesn’t require elected office – and might even be damaged by a campaign.” http://bit.ly/bFKNqV

FRIENDLY FIRE -- “Pelosi rips Gibbs's House prediction,” by Jonathan Allen and John Bresnahan: “Speaker Pelosi bashed White House Press Secretary Robert Gibbs [during a closed-door House Democratic caucus meeting] … During the tense evening meeting, the speaker grilled the top White House aide in attendance, senior legislative affairs staffer Dan Turton, about the impact of Gibbs' comments. ‘How could [Gibbs] know what is going on in our districts?’ Pelosi told her members in the basement of the Capitol Tuesday night. ‘Some may weigh his words more than others. We have made our disagreement known to the White House.’ Then she turned to Turton and asked him to acknowledge that Gibbs' comments had been damaging to the Democratic cause … Turton … said Gibbs was speaking off the cuff and not from prepared material [during his ‘Meet the Press’ comments. At yesterday’s briefing, Gibbs said: ‘I think we’ll retain the House. I was asked if there were enough seats in play, and I think there are.’] But that didn't appease Democratic lawmakers … Pelosi also accused the White House of playing favorites with the Senate, where President Barack Obama served. … After allowing members to vent on Gibbs, Pelosi tried to tamp down the flames a bit. ‘Let's not get distracted by friendly fire,’ she said. http://bit.ly/dpWHmF

WASHINGTON, INC. -- "Pharmaceutical Research and Manufacturers of America (PhRMA) announced that John J. Castellani will assume the role of President and Chief Executive Officer, effective September 1, 2010. Mr. Castellani joins PhRMA after more than nine years as President and CEO of Business Roundtable, a leading association of corporate chief executive officers. He will succeed former PhRMA President and CEO Billy Tauzin, who transitioned to a role as senior advisor earlier this year. Mr. Castellani has extensive experience in business, public affairs and government relations. As head of the Business Roundtable, Mr. Castellani has worked along side the nation’s leading CEOs and with Members of Congress and Administration officials to drive economic growth and create opportunities for American workers and business." Full release http://bit.ly/c2ras1

--LAUNCHING TODAY: The American Television Alliance, which calls itself "a coalition of 31 consumer groups, satellite companies, independent programmers and cable companies who have all come together to urge the FCC to update rules that allow broadcasters to hold consumers -- and carriers -- hostage over rate increases ... The breadth and diversity of this coalition underscore the growing severity of this problem - and marks the first time that so many companies -- many of them competitors -- have united in common cause to address it. The rules governing how broadcasters distribute their programming were last updated in 1992 -- well before companies like DIRECTV or DISH Network were even in existence. The coalition has one common-sense goal: To get the FCC to update the rules to reflect today's radically-different marketplace."

--HAPPENING TODAY: U.S. Chamber Jobs Summit: "The U.S. Chamber of Commerce will host commissioners Bowles and Simpson and Members of Congress for a discussion on the role of government in creating an atmosphere in which the private sector can thrive, and policies needed to generate jobs, accelerate economic growth, and bolster our free enterprise system. In an open letter to President Obama, Congress, and the American people, the Chamber will highlight the uncertainty businesses are feeling from the growing government and offered solutions to what remains our nation’s number one challenge: creating jobs and reviving economic growth. President and CEO Tom Donohue in his keynote address in front of 500 business, trade association, nonprofit and government leaders will call on the administration to immediately put a stop to the cascade of new regulations that are creating uncertainty for the business community and stalling job creation." http://www.freeenterprise.com/jobs-summit

THE AGENDA -- REPUBLICANS TRY TO PREEMPT LAME-DUCK EXPLOITS -- Jake Sherman and Manu Raju: “Democrats insist that any lame-duck legislative session would be, well, pretty lame -- a forced march focused on continuing resolutions and other minor agenda items. But some conservative activists and GOP leaders seem to be playing to voter passions and issuing warnings … Their nightmare scenario: A weakened Democratic majority might make one final stab at forcing through massive spending bills, passing a wildly controversial cap-and-trade package and generally enshrining a liberal agenda — after it has lost elections nationwide. House Minority Leader John Boehner (R-Ohio), in a statement to POLITICO, called on Speaker Nancy Pelosi (D-Calif.) and Majority Leader Steny Hoyer (D-Md.) to ‘guarantee — right now — that they will not bring members back for a “sour grapes” session after the election.’ Never mind that Democrats don’t even know what their November schedule might be four months out, Boehner is laying down his marker. … Nadeam Elshami, Pelosi’s spokesman, said it’s the ‘height of hypocrisy for any Republican to be talking about schedule.’ But several House and Senate Democrats agreed with their Republican counterparts that nothing substantive is likely to happen in a lame-duck session, despite rhetorical warnings from conservatives. ‘In my experience, lame ducks are usually dead ducks,’ said Senate Finance Committee Chairman Max Baucus (D-Mont.).” http://bit.ly/9xJxKs

SPEED READ:

--AP/New Orleans, “Gulf gusher to keep flowing as cap test delayed,” by Tom Breen and Harry R. Weber: “A pivotal moment in the Gulf oil crisis hit an unexpected snag Tuesday evening when officials announced they needed more time before they could begin choking off the geyser of crude at the bottom of the sea. BP and federal officials did not say what prompted the decision or when the testing would begin on a new, tighter-fitting cap it had just installed on the blown-out well.” http://yhoo.it/anD0Gi

--WSJ A3, “Court Tosses Out FCC Rules to Curb Indecent Speech,” by Jess Bravin and Amy Schatz: “A federal appeals court threw out the FCC's rules on indecent speech Tuesday, in a big win for broadcasters that could lead to a new Supreme Court test of the government's power to control what is said on television and radio.” http://bit.ly/9jOafU

--NYT A1, “Police Charged in 2006 Killings in New Orleans,” by Campbell Robertson in New Orleans: “Four current and two former New Orleans police officers have been charged in connection with the killing of unarmed civilians on the Danziger Bridge in the chaotic days after Hurricane Katrina.” http://nyti.ms/dkZXBm

--NYT A1, “Iranian’s Saga Takes a U-Turn Toward Bizarre,” by David E. Sanger: “An Iranian nuclear scientist who American officials say defected to the United States last year provided information about Iran’s nuclear weapons program and then developed second thoughts, walked into the Iranian Interests Section of the Pakistani Embassy here on Monday night and declared that he wanted a ticket back to Tehran. The bizarre episode was the latest in a tale that has featured a mysterious disappearance from a hotel room in Saudi Arabia, rumors of a trove of new intelligence about Iran’s nuclear facilities and a series of contradictory YouTube videos. It immediately set off a renewed propaganda war between Iran and the United States.” http://nyti.ms/djfdmq

--UPDATE: HE’S GONE -- Reuters: “An Iranian nuclear scientist who disappeared more than a year ago and mysteriously turned up in Washington is on his way back to Iran via a third country, Iran's foreign ministry spokesman was quoted as saying by Iranian semi-official news agency ISNA.”

TECH WATCH – A GLIMPSE OF THE FUTURE – BBC, “'Virtual human' Milo comes out to play at TED in Oxford,” by Jonathan Fildes: “Microsoft has shown off its ‘virtual human’ that reacts to a person's emotions, body movements and voice. Milo, as he is known, is designed for use with the firm's hands-free Xbox 360 motion controller called Kinect. ... At the moment, the technology is still in development and Microsoft has no plans to release it.” http://bit.ly/aARYkP

BUSINESS BURST – WSJ A1, “Early Tests Pin Toyota Accidents on Drivers,” by Mike Ramsey and Kate Linebaugh: “The U.S. Department of Transportation has analyzed dozens of data recorders from Toyota Motor Corp. vehicles involved in accidents blamed on sudden acceleration and found that the throttles were wide open and the brakes weren't engaged at the time of the crash ... The early results suggest that some drivers who said their Toyotas and Lexuses surged out of control were mistakenly flooring the accelerator when they intended to jam on the brakes. But the findings—part of a broad, ongoing federal investigation into Toyota's recalls—don't exonerate the car maker from two known issues blamed for sudden acceleration in its vehicles: "sticky" accelerator pedals that don't return to idle and floor mats that can trap accelerators to the floor.” http://bit.ly/c3uM1E

SPORTS BLINK – NYT A1, “A Legacy of Championships From the Man Who Hated to Lose,” by Richard Goldstein: “George Steinbrenner, who bought a declining Yankees team in 1973, promised to stay out of its daily affairs and then, in an often tumultuous reign, placed his formidable stamp on 7 World Series championship teams, 11 pennant winners and a sporting world powerhouse valued at perhaps $1.6 billion, died Tuesday morning died Tuesday morning at a hospital in Tampa, Fla., where he lived. He was 80. The cause was a heart attack, the Yankees said. Mr. Steinbrenner had been in failing health for several years. His death came eight months after the Yankees won their first World Series title since 2000.” http://nyti.ms/b2eL3O

--AP via ESPN, “McCann comes up big, NL finally wins All-Star game”: “This sure was shaping up to be another lost night for the National League. Then, one key swing by Brian McCann and a heads-up play by right fielder Marlon Byrd ended an inexplicable All-Star funk. McCann hit a three-run double in the seventh inning, Byrd alertly threw out David Ortiz to slow a ninth-inning rally and the NL captured its first Midsummer Classic since 1996 with a 3-1 victory Tuesday night.” Story w/ highlights http://es.pn/9zh9gi

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Microsoft platforms-such as Windows 7 and our new cloud service, Azure-are the foundation for innovative partnerships that generate new products and services and drive growth and investment opportunities.

In fact, for every $1 of revenue Microsoft earns, our partners earn nearly $9. In total, the Microsoft community of partners and professionals employs nearly 15 million people and generate more than $500 billion in annual revenue that fuels economic growth in local communities throughout the world.

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OBAMA PLAYS THE 'RACE CARD' ONCE AGAIN ---- CALLING Al-Qaeda A 'RACIST ORGANSIZATION' BECAUSE IT KILLED AFRICANS IN AFRICA! ---- HOW ABOUT THE MANY THOUSANDS OF WHITE PEOPLE Al-Qaeda HAS MURDERED? === OBAMA IS A RACIST WHO ONLY SEES AFRICANS AS VICTIMS OF Al-Qaeda --- AND NOT THE OTHER RACES WHO HAVE BEEM HARMED BY Al-Qaeda. === OBAMA TRULY IS 'COLOR BLIND' ...OBAMA IS A SCREWBALL ...

Why don't the Republican Politicians guarantee, right now, in writing, that they won't block any more legislation just to gain cheap political points. That would mean up or down votes for all of Obama's appointees (just like they demanded when W. was in office), stop flip flopping on legislation they sponsored just a few years ago and in some cases just months ago! Republican Politicians need to stop holding the American Peoples agenda hostage to their desire for more power and money. Democratic Politicians need to grow some spine, quit dithering and worrying about fundraising and do the work they were sent there to do. Fix our broken government or get out the way so someone with some "can do" attitude will.